manish loudi

8/3/2019 manish loudi

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A

Project Study Report

On

Training Undertaken at

Anand Rathi Share & Stock Brokers Ltd.

On-Line Trading

Submitted in partial fulfillment for the

Award of degree of

Bachelor of Business Administration

Submitted by:- Submitted to: -

Manish Loudi Dr. A.K. Gupta

BBA Final Year

University of Commerce College, Jaipur

Batch: 2010-2012


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Preface

Anand Rathi Mutual Fund Company Ltd. is one of the leading share broking companies,

having its head office in Mumbai; it has its branches in almost all the parts of India. The

company is not just a share broking house it is a wealth management company which

manages the wealth of its clients. The company has appointed a large number of

franchisees across India and treats its franchisees as its business partner. The company

earns maximum of its revenue through brokerage.

The project is On-Line Trading

1. As the title suggests the basic objective of project is to understand the appropriate

organizational structure of the ANAND RATHI SHARE & STOCK BROKERS LTD. LTD

2. To analyze the online trading and its process.


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EXECUTIVE SUMMARY

For management career, it is important to develop managerial skills. In order to achieve

positive and concrete results, along with theoretical concepts, the exposure of real life

situation existing in corporate world is very much needed. To fulfill this need, this practical

training is required.

I took training in Anand Rathi Share & Stock Brokers Ltd.. It was my fortune to get

training in a very healthy atmosphere. I got ample opportunity to view the overall working of

the company.

This report is the result of my 45 days of summer training in Anand Rathi Share &

Stock Brokers Ltd., as a part ofM.B.A. The subject of my report is- Online trading.


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TABLE OF CONTENTS

Share & Stock Brokers Ltd

ONLINE TRADING INFRASTRUCTURE

The emergence of online exchanges has facilitated faster transactions by providing

online trading portals and brokerage houses ease and flexibility. The Internet has indeed

CHAPTE

RDESCRIPTION PAGE

Certificate from the Company

Preface

Acknowledgement

Executive Summary

1. Share & Stock Brokers Ltd 07

2. Anand Rathi Share & Stock Brokers Ltd 24

3. Research Methodology 313.1 Title of the Study 32

3.2 Duration of the Project 55

3.3 Objective of Study 55

3.4 Type of Research 56

3.5 Sample Size 57

3.6 Scope of Study 58

3.7 Limitation of Study 59

4. Facts and Findings 60

5. Analysis and Interpretation 666. SWOT 78

7. Conclusion 80

8. Recommendation and Suggestions 81

9. Bibliography 82

10. Appendix 83


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opened up new opportunities for conducting the business. The worldwide stock exchanges

has made a major shift from the traditional method of trading and now conduct a bulk of its

business online through its brokers and partners.

In the developed countries majorly all the exchange transactions are conducted

online. The trend took off slowly in India and the National Stock Exchange (NSE) and the

Bombay Stock Exchange (BSE) two of the largest exchanges in India have been conducting

online trade successfully for some time.

WHY ONLINE TRADING ENTERED LATE IN INDIA?

The Indian exchanges and brokering houses have been very slow in moving their

transactions online and the major reason has been the lot government regulations. The initial

delay was due to laying down the specifications for creating Closed User Groups (CUGs).

This issue was resolved between the Department of Telecommunications (DoT) and the

Finance Ministry around 1998 and after that soon came the online trading portals like IL&FS

investsmart, ICICIDirect.com, motilaloswal.com, sharekhan.com etc. Connectivity related

issue was perhaps the most important technological factor.RBI made regulation that it is

mandatory for company to store at least 7 year financial and transactional data.

In the non-stop, 24 hours a day, seven days a week world of investing, we are able to

Obtain investment news around the clock

Check quotes on exchanges all over the world day or night

Easily compare one investment to another via numerous ratios, charts, graphs, and tables

Screen for the best investments to fit our individual goals and requirements

Trade stocks as easily and quickly as professional traders

Calculate retirement needs based on various scenarios

Regularly monitor portfolios and make necessary changes quickly and almost effortlessly

Control the routing of individual trades for the best possible price and execution

Even many years after the launch of the first online brokerage firm, there remain a

large contingent of individual investors who still pick up the phone and call their stock broker

to buy and sell investments. However, every year a growing number of investors are placing

their trades using online brokers.

INDIAN EXCHANGES: NSE and BSE


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The NSE and BSE are among the largest exchanges in the country handling very

large daily trading volumes, support large amounts of data traffic, and have a very large

nationwide network. The trading volume in year 2000 was huge with the average daily

turnover in the capital markets segment at NSE is around Rs 2300 crore and in the

derivatives segment, around Rs 1300 crore. The average daily traffic volume was around

one million trades per day in the capital markets segment and around 50,000 trades per

day in the derivatives segment and there were around 13,000 registered users in both

segments and an average ofaround9500 users is logged in at a time. At BSE the average

daily turnover in 2001-2002 (April-March) was Rs 1244.10 crore and the number of average

daily trades was Rs 5.17 lakh.

THE NETWORK DESIGN

Any online exchange should always be-on, safe, secure, redundant and should have

adequate backup & recovery processes. The Vice President of NSE-IT G.M Shenoy tells

that the basic design.

Objective of NSE was to provide fair, equal and transparent access across all NSE

nationwide locations and to provide connectivity to the trading members as soon as possible.

RECOMMENDATIONS OF SEBI

The SEBI has also played an important role in the issue of the guidelines regarding

online trading so that the chances of fraud and misrepresentation are minimized.

The stock brokers which are being registered with Securities Exchange Board of India

(SEBI) will have to apply to stock exchanges for a formal permission. The following

conditions must be fulfilled-

The online trading company must have a minimum net worth of Rs 50 lakh

The encryption technology should be there in the system used by the brokers to ensure the

provision for confidentiality ,security ,justifiability and reliability of data .The user id, first

level and second level password, automatic expiry of passwords at the end of a reasonable

period,


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The brokers must maintain adequate back-up systems and data storage capacity which

must be checked by the stock exchanges.

SEBI has recently announced that to reduce the fraud cases each and every broking

house has to give back the full amount of customer after each three month, they will have

to show the zero balance of every customers account at the end of every 3 month

The minimum qualification must be laid down by the stock exchange to ensure that the

persons hired by the brokers must have the proper qualification regarding trading so as to

guide the clients and he can communicate regarding trading instructions.

To ensure the authenticity and accuracy of data a certification agency must be appointed

using the certification technologies when notified by the government or the SEBI.

The better client and the broker relationship to be maintained.

To determine the risk associated with the clients the brokers must have the have sufficient

verifiable information about clients and the stock exchange must ensure it.

The clients must be taken into an agreement stating about all the obligations and rights

including the minimum service standards to be maintained by the service provider broker

for services specified by SEBI/exchanges for Internet-based trading from time to time.

The web site of the broker providing the online trading facility should contain information

rules and regulations affecting client broker relationship, arbitration rules, investor

protection rules, etc meant for investor protection. It should also provide and display

prominently hyper link to the web site/page on the web site of the relevant stock

exchange(s) displaying rules/ regulations/circulars. Ticker/quote/order book displayed on

the web site of the broker should display the time stamp as well as the source of such

information.

An e-mail should be sent to he investor for the confirmation of his Order or trade.

The limits of trading and exposure provided to the client must be set on system-based

control and brokers and exchanges must ensure it. The limits must be predefined by the

broker on the exposure and turnover of each client. The system of broker should be such

that it is capable of assessing the risk of the client as soon as the order comes in. The

system should inform the clients client the reports on margin requirements, payment and

delivery obligations etc.

As per the regulations the Contract Notes must be issued to clients within 24 hours of the

trade execution.


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Cross trades of the clients will not be allowed with each other to the brokers using Internet-

based systems for routing client order and all orders must be offered to the market for

matching.

A separate working group has been set up to look into the surveillance and enforcement-

related issues arising due to Internet-based securities trading. However, general anti-fraud

provisions (SEBI Fraudulent and Unfair Trade Practices Regulations, 1995) will apply to all

transactions involving securities or financial services, regardless of the medium

ONLINE TRADING


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Online trading involves investment activity which takes place over the Internet and it

does not require physical inclusion of the broker. An investor has to register with an online

trading portal like Investsmart.in, ICICIdirect.com,Religare, motilaloswal.com and

sharekhan.com and many companies like that and investor gets into an agreement with the

firm to trade in different securities according to the terms and conditions given on the

agreement. As the servers of the online trading portal are connected all the time to the stock

exchanges and designated banks the order processing is done in real time and investors

can also have updates on the trading.

They can also check the status of their orders either through e-mail or through the

interface that it cannot be accessed by a third party. Some options are usually given to users

such as to link their bank account, Demat accounts and brokerage accounts into a single

interface. A single window is also there for all exchanges and a single screen is there for the

complete order routing mechanism. The hardware used comprises Web and application

servers, switches, routers, firewalls and security devices, and specialized appliances. There

are two broad models in play in the online brokerage space-

Bank-backed firms

Entrepreneur-floated firms.

Bank-backed brokerages such as ICICIdirect and HDFC Securities have expanded on

the basis of their brand name and the trust of investors in them. The integrated 3-in-1

accounts offered by these bank-backed brokerages help their parent bank by giving it

accounts along with float income.

In second case i.e. Entrepreneur-backed companies like Investsmart, Indiabulls,

Sharekhan, Religare and IndiaInfoline have expanded by offering customers a mix of online

and offline accounts, higher margin finance amounts and lower brokerage rates. Though the

bank based has performed better but the latter have not lagged too far behind.

The reason why online trading has developed over conventional offline brokerage

firms is that this conventional method struggled with unfavorable economies. Staff cost is

just one

Example of it, as the markets opens for 335 minutes a day one dealer can at best

execute 500 trades in a day while online company like ICICI direct executes 150,000-


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This method of trading reduces the settlement risk for the investor as when a short

sell order is played the orders are squared off at the specified cut-off time and are not

allowed to be carried forward.

9. Provides live financial news & analysis

The online sites also provide live terminals which provide streaming news to give

investor the latest financial information as it occurs.

10.Online help desk

Some companies provide online help desk an investor cancan contact the Tele

Trading Executives from the Tele Trading team during and after market hours and can clarify

questions.

11.Instant order trade confirmations

Through online trading every trade is confirmed immediately and investor receives an

on-screen confirmation following every trade with full details for the investors records

which avoids costly errors that would have been discovered when it is too late.

12.Keeps Information Secure

As per the guideline provided by SEBI every effort has to be made to keep the

investors account and personal information secure by use of encryption technology and

updated security technology to advanced fraud prevention measures.

DISADVANTAGES OF ONLINE TRADING

In online terminal, investor cant get customized expert advice, whereas in offline the broker

gives suggestions according to investors strategy (i.e. short term or long-term)Brokerage is high compared to offline.

Privacy is less due to hacking scandals

Transactional errors due to technical problems

THE EMERGENCE OF ONLINE TRADING IN INDIA


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The Indian trader is being fancied by the democratized world of online trading or also

known as e-broking. The regular and attractive advertisements in the print media and

electronic media have added to this fancy world

But as we compare to the Western countries, in India online trading has not still

grasped the market , but has done a very important amount of progress in the past years

and the future of online trading is bright. That is why many new companies are coming into

this form of business structure and the existing companies are changing to this new format

besides offline and other traditional forms of business. With only a mere share of 10% online

trading a combined gross turnover of around Rs. 12000-13,000 crores handled by the BSE

and NSE together there is a much greater scope for online trading.

The various players whos offering and facilities is different according to the individual

investors. This will help us understand what processes and strategies competitors have

adopted to attract and retain investors and satisfy their investments needs.


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APPROVED STOCK EXCHANGES IN INDIA

1. Up. Stock Exchange, Kanpur.

2. Vadodara Stock Exchange, Vadodara

3 Koyambtour Stock Exchange, Coimbatore

4 Meerut Stock Exchange, Meerut

5 Mumbai Stock Exchange, Mumbai

6 Over the Counter Exchange of India, Mumbai

7 National Stock Exchange, Mumbai

8 Ahmedabad Stock Exchange, Ahmedabad

9 Bangalore Stock Exchange, Bangalore

10 Bhuvaneshwar Stock Exchange, Bhuvaneshwar

11 Calcuttaa Stock Exchange, Calcutta

12 Cochin Stock Exchange, Cochin

13 Delhi Stock Exchange, Delhi

14 Guwahati Stock Exchange, Guwahati

15 Hyderabad Stock Exchange, Hyderabad

16 Jaipur Stock Exchange, Jaipur

17 Canara Stock Exchange, Mangalore


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18 Ludhiana Stock Exchange, Ludhiana

19 Chennai Stock Exchange, Chennai

20 M.P. Stock Exchange, Indore

21 Magadh Stock Exchange,, patna

22 Pune Stock Exchange, Pune

23 Saurashtra Stock Exchange, Rajkot.

24 Capital Stock Exchange, Kerala Ltd. Tiruvananthapuram, Kerala


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MAJOR STOCK EXCHANGES IN INDIA

Vision

"Emerge as the premier Indian stock exchange by establishing global

benchmarks"

INTRODUCTION

Bombay Stock Exchange Limited is the oldest stock exchange in Asia with a rich

heritage. Popularly known as "BSE", it was established as "The Native Share & Stock

Brokers Association" in 1875. It is the first stock exchange in the country to obtain

permanent recognition in 1956 from the Government of India under the Securities

Contracts (Regulation) Act, 1956.The Exchange's pivotal and pre-eminent role in the

development of the Indian capital market is widely recognized and its index, SENSEX, is

tracked worldwide. Earlier an Association of Persons (AOP), the Exchange is now a

demutualised and corporatised entity incorporated under the provisions of the Companies

Act, 1956, pursuant to the BSE(Corporatisation and Demutualisation) Scheme, 2005

notified by the Securities and Exchange Board of India (SEBI).

With demutualisation, the trading rights and ownership rights have been de-linked

effectively addressing concerns regarding perceived and real conflicts of interest. The

Exchange is professionally managed under the overall direction of the Board of

Directors.The Board comprises eminent professionals, representatives of Trading Members

and the Managing Director of the Exchange. The Board is inclusive and is designed to

benefit from theparticipation of market intermediaries.


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In terms of organisation structure, the Board formulates larger policy issues and

exercises over-all control. The committees constituted by the Board are broad-based.The

day-to-dayoperations of the Exchange are managed by the Managing Director and a

management team of professionals.

The Exchange has a nation-wide reach with a presence in 417 cities and towns of

India. The systems and processes of the Exchange are designed to safeguard market

integrity and enhance transparency in operations. During the year 2004-2005, the trading

volumes on the Exchange showed robust growth.

The Exchange provides an efficient and transparent market for trading in equity,

debt instruments and derivatives. The BSE's On Line Trading System (BOLT) is a

proprietory system of the Exchange and is BS 7799-2-2002 certified. The surveillance and

clearing & settlement functions of the Exchange are ISO 9001:2000 certified.

NSE

The Organisation

The National Stock Exchange of India Limited has genesis in the report of the High

Powered Study Group on Establishment of New Stock Exchanges, which recommended

promotion of a National Stock Exchange by financial institutions (FIs) to provide access to

investors from all across the country on an equal footing. Based on the recommendations,

NSE was promoted by leading Financial Institutions at the behest of the Government of

India and was incorporated in November 1992 as a tax-paying company unlike other stockexchanges in the country. On its recognition as a stock exchange under the Securities

Contracts (Regulation) Act, 1956 in April 1993, NSE commenced operations in the

Wholesale Debt Market (WDM) segment in June 1994. The Capital Market (Equities)

segment commenced operations in November 1994 and operations in Derivatives segment

commenced in June 2000.


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QUALIFICATIONS FOR MEMBERSHIP OF A RECONGNISED STOCK EXCHANGE

Persons satisfying following conditions are eligible to be elected as a member of a

recognised stock exchange-

(a) he is not less then twenty-one years of age;

(b) he is a citizen of India, unless the governing body has relaxed this condition with the prior

approval of the Central Government;

(c) he has not been adjudged bankrupt;

(d) he has not compounded with his creditors unless he has paid them fully;

(e) he has not been convicted for an offence involving fraud or dishonesty;

(f) he is not engaged as principal or employee in any business other than that of securities

except as a broker or agent not involving any personal financial liability;

(g) he has never been expelled or declared a defaulter by any other stock exchange;

(h) he has not been previously refused admission to membership unless a period of one year

has elapsed since the date of such rejection.

A person eligible for admission as a member shall be admitted as a member only if

he satisfies the following additional conditions-

(i) he has worked for not less than two years as a partner with, or'an authorised assistant or

authorised clerk or remisier or apprentice to a member; or

(ii) he agrees to work for not less than two years as a partner with or representative member

with another member and to enter into bargains on the floor of the stock exchange and not

in his own name but in the name of such other member, or

(iii) he succeeds to the established business of a deceased or retiring member who is his

father, uncle; brother or any other person who is in the option of the governing body a close

relative.


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CORPORATISATION OF STOCK EXCHANGE

The SEBI approved the Kania Committee report on corporatisation of the stock exchange

on 29trh November 2002. A uniform model of corporatisation and dematualisation has

been adopted for all exchanges from a not for profit entity into a for profit one. There is a

serious attempt to free the stock exchange from the clutches of brokers by separating the

trading and administration activities of stock exchange.

In the new arrangement, brokers have no say in the administration of an exchange. Abroker now gets only trading right after paying the fees fixed by the exchange. The

ownership right vests in shareholders of the corporatised exchange. The shares of an

exchange can also listed on other Exchange.

INDICES

IISL Indices

Major Indices Other Indices

S&P CNX NiftyCNX IT Sector

Index

CNX Nifty Junior CNX Bank Index

CNX 100 CNX FMCG Index

S&P CNX 500 CNX PSE Index

CNX Midcap * CNX MNC Index

S&P CNX Defty CNX Service Sector Index
http://nseindia.com/content/indices/ind_nifty.htmhttp://nseindia.com/content/indices/ind_cnxit.htmhttp://nseindia.com/content/indices/ind_cnxit.htmhttp://nseindia.com/content/indices/ind_jrnifty.htmhttp://nseindia.com/content/indices/ind_cnxbank.htmhttp://nseindia.com/content/indices/ind_cnx100.htmhttp://nseindia.com/content/indices/ind_cnxfmcg.htmhttp://nseindia.com/content/indices/ind_cnx500.htmhttp://nseindia.com/content/indices/ind_cnxpse.htmhttp://nseindia.com/content/indices/ind_cnxmidcap.htmhttp://nseindia.com/content/indices/ind_cnxmnc.htmhttp://nseindia.com/content/indices/ind_defty.htmhttp://nseindia.com/content/indices/ind_ssi.htmhttp://nseindia.com/content/indices/ind_cnxit.htmhttp://nseindia.com/content/indices/ind_cnxit.htmhttp://nseindia.com/content/indices/ind_jrnifty.htmhttp://nseindia.com/content/indices/ind_cnxbank.htmhttp://nseindia.com/content/indices/ind_cnx100.htmhttp://nseindia.com/content/indices/ind_cnxfmcg.htmhttp://nseindia.com/content/indices/ind_cnx500.htmhttp://nseindia.com/content/indices/ind_cnxpse.htmhttp://nseindia.com/content/indices/ind_cnxmidcap.htmhttp://nseindia.com/content/indices/ind_cnxmnc.htmhttp://nseindia.com/content/indices/ind_defty.htmhttp://nseindia.com/content/indices/ind_ssi.htmhttp://nseindia.com/content/indices/ind_nifty.htm


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CNX Midcap 200 ** S&P CNX Industry Indices

Customized Indices

CNX Energy Index

CNX Pharma Index

* CNX Midcap - Introduced from July 18, 2005** CNX Midcap 200 - Discontinued from July 18, 2005

Name of Share Price Indices Changed

On 28 July 1998, main Share price indices have been renamed as follows:

Old Name New Name
http://nseindia.com/content/indices/ind_cnx200.htmhttp://nseindia.com/content/indices/ind_indusindices.htmhttp://nseindia.com/content/indices/ind_custindices.htmhttp://nseindia.com/content/indices/ind_cnxenergy.htmhttp://nseindia.com/content/indices/ind_cnxpharma.htmhttp://nseindia.com/content/indices/ind_cnx200.htmhttp://nseindia.com/content/indices/ind_indusindices.htmhttp://nseindia.com/content/indices/ind_custindices.htmhttp://nseindia.com/content/indices/ind_cnxenergy.htmhttp://nseindia.com/content/indices/ind_cnxpharma.htm


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NSE-50 S & PCNX Nifty

Crisil 500 S & PCNX-500

Main Share Price Index in Famous Share Market of the World

Mumbai DOLEX

SENSES

S& PCNX

NIFTY FIFTY

New York DOW JONES

Tokyo NIKKEI

Frankfurt (Germany) MID DAX

Hong Kong HANG SENG

Singapore SIMEX

STRAITS TIMES

Anand Rathi Share & Stock Brokers Ltd

COMPANY PROFILE


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Portfolio ManagementServices (PMS)

Loan Against Shares

All these are managed by powerful research teams.

There are some milestones for the group, which have the great role in the position of the

company, these milestones have drastically changed the position of the company and

move it ahead from what it was previously. These milestones changed the fate of the

group. The group became able to have these milestones because of its continuous and

dedicated performance. These milestones are: -

1994: Started activities in consulting and Institutional equity sales with staff of 15

1995: Set up a research desk and empanelled with major institutional investors

1997: Introduced investment banking businesses Retail brokerage services launched

1999: Lead managed firstIPO and executed first M & A deal

2001: Initiated Wealth Management Services

2002: Retail business expansion recommences with ownership model

2003: Wealth Management assets cross Rs1500 crores. Launch of Wealth Management

servicesin Dubai Retail Branch network exceeds 50

2004: Commodities brokerage and real estate services introduced. Wealth

Management assets cross Rs3000crores. Institutional equities business re launched and

senior research team put in place.

Retail Branch network expands across 100 locations within India

2005: Real Estate Private Equity Fund Launched. Retail Branch network expands across

200 locations within India

2006: AR Middle East, WOS acquires membership of Dubai Gold & Commodity

Exchange (DGCX)

Ranked amongst South Asia's top 5 wealth managers for the ultra-rich by Asia Money 2006

poll


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Ranked 6th in FY2006 for All India Broker Performance in equity distribution in the High Net

worth Individuals (HNI) Category

Ranked 9th in the Retail Category having more than 5% market share

Completes its presence in all States across the country with offices at 300+ locations within

India.

2007: City Group Venture Capital International picks up 19.9% equity stake Retail

customer base crosses 200 thousand

These were the milestones, which change the Anand Rathi group completely and launch it

on the path of success.

PRODUCT AND SERVICES


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Equity & derivatives brokerages

Anand Rathi provides end to end equity solutions to institutional and individual

investors. Consistent delivery of high quality advice on individual stocks, sector trends and

investment strategy has established us a competent and reliable research unit across the

country.

Clients can trade through AR online on BSE & NSE for both equities and derivatives. They

are supported by dedicated sales & trading desks across the country. Research and

investment ideas can be accessed by clients either through their designated dealers, email,web or SMS.

Mutual Funds

AR is one of the Indias top Mutual fund distribution houses. AR success lies inn its

philosophy of providing consistently superior, independent and unbiased advice to ARs

clients backed by in-depth research. AR family believes in the importance of selecting

appropriate asset allocations based on the clients risk profile.

AR have a dedicated mutual fund research cell for mutual funds that consistently

churns out superior investment ideas, picking best performing funds across asset classes

and providing insight into performance of select funds.

Depository Services


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AR Depository Services provides with a secure and convenient way for holding your

securities on both CDSL & NSDL. AR Depository services include settlement, clearing and

custody of securities, registration of shares and dematerialization. AR offer daily updated

internet access to holding statement and transaction summary.

Commodities

Commodities broking-a whole new opportunities to hedge business risk and an

attractive investment opportunity to deliver superior returns for investors .ARs commodities

broking services include online futures trading through NCDCX & MCX and depository

services through CDSL.

Commodities broking is supported by a dedicated research cell that provides both technical

as well as fundamental research. ARs research covers a broad range of traded

commodities including precious and base metals, oil and oilseeds, agri -commodities such

as wheat, chana, guar, gum and spices.

Insurance Broking

As an insurance broker, AR provides to its client comprehensive risk management

techniques, both within the business as well as on the personal front .Risk management

includes identification, measurement and assessment of the risk and handling of the risk, of

which insurance is an integral part. The firm deals with both life insurance and general

insurance products across all insurance companies.


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IPO Management

Anand Rathi is a leading primary market distributor across the country. ARs strong

performance in IPOs has been a result of its vast experience in the market, a wide network

of branches across India, strong distribution capabilities and a dedicated research team.

Anand Rathi has been consistently ranked among the top 10 distributors of IPOs on

all major offerings .ARs IPOs research team provides clients with in depth overview of

forthcoming IPOs as well as investment recommendations. Online filling of form is also

available.

Loan Against Shares

Registration of Client

Minimum Rs.2 lacs portfolio of approved shares.

Rs 1.00 lacs Margin either in Cash or Eligible Securities

To Execute Master Loan Agreement

To Execute general power of attorney

To sign Loan documents

Opening of HDFC Bank A/c to be operated by RGFL.


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Requirement:

Client should already have a Trading and DP Account with Anand Rathi Financial Services

Ltd / Anand Rathi Shares & Stock Brokers Ltd with Auto-Pay-in Facility.

Execution of Master Loan Agreement.& Bank Account Opening Form

Portfolio Management

Portfolio Management is an important foundation of shares and mutual fund business.

From the investors perspective. Active Portfolio Management function is obviously

important. Active portfolio management requires detailed research of stock traded in the

market. While the objective of research is to establish a view on the future stock prices. it

usually takes any of the following three alternate forms.

Fundamental Analysis:-This analysis involves research into the operations and finances

of the company with the objective of estimating its future earnings and risk profile. The

researchers consider many factors such as companys position relative to other industry

players, impact of the regulatory environment and quality of management.

Technical Analysis:-. Technical analysis is second analysis tool for short term or for day

trading. As fundamental analysis is used for long term investments analysis likewise

technical analysis is made for day trading or short term trading.

Technical analysis also make use of volumes, support and resistance levels, technical

indicators and other parameters which are useful to analyze the share price movements in

short term or in day trading

Quantitative Analysis:- This analysis uses mathematical models for equity valuation and

may also use fundamental and technical information. In todays environment computers

based models form the basis for such analysis. This analysis is more likely to be done to

evaluate the market as whole or particular sector/industry.


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RESEARCH METHODOLOGY

The basic task of research is to generate accurate information for use in decision making.

Research can be defined as the systematic and objective process of gathering, recording

and analyzing data for aid in making business decisions.

There are basically two techniques adopted for obtaining information:

1. Primary Data.

2. Secondary Data.

Primary Data

Primary Data is gathered specifically for the project at hand through personal interviews

with the accounts officers.

Secondary data is previously collected and assembled for some project other than the one

at hand. It is gathered and recorded by someone else prior to current needs of the

researcher. It is less expensive than the primary data.

SECONDARY DATA

Secondary data was collected from Anand Rathi Share & Stock Brokers Ltd.


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ONLINE TRADING

CONCEPT OF SHARE TRADING

The concept of share broking emerged after the establishment of the joint stock

companies. The ownership of the companies was divided into small parts and that every

part was called share. So, the term Share denominates some part in the ownership of the

company. The shares are freely transferable subject to the some certain restrictions.

When the need was felt to sell the shares by the owner of the shares, it was difficult to find

out the buyers of the shares who want to buy the shares at the price the seller want to sell.

At that time a need was felt to bring the buyers and sellers on a common platform.

These persons are called the share Brokers who find the persons who wish to buy or sell

their securities. The whole process of finding the buyers and sellers of the securities by thebrokers is called the Share Broking.

The origination of the Indian securities market may be traced back to 1975, when 22

enterprise brokers under a Banyan tree established the Bombay Stock Exchange (BSE).


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ON LINE TRADINGON LINE TRADING

Meaning of Online Trading

Change is the law of nature. There were times when man was a wanderer or a normal.

He himself had to go place to place in search of food, water and now everything is

available at your doorstep just at the click of the mouse. The growth of information

technology has affected almost all sectors of life. Internet has enabled us to get every

information at our doorstep. When Internet has affected all sectors he could stock markets

the most important player of the economy, has remained far behind? Like all other sectors

Internet has set its feet in the stock markets also.

Internet trading commissions are clearly posted on the websites of the various services,

and are typically a fixed rate charge, depending upon the type of security being traded and

the size of trade. In theory, therefore, an Interest investor always knows what commission

he is being charged on each trade. Internet investors can take as much time as they would

like to take prior to placing a trade order. Similarly the online investor likely does not have

to worry that his broker is making unauthorized trades.

Since there is no individual broker making a commission, the only person who is authorized

to trace in a the account is the actual investor. Furthermore, the internet investor can never

become a victim of excessive trading (where for the broker) since the investor maintainstotal control over the number of transactions which take place in the account.

All of these positive features of internet trading may lead the unwary investor to believe that

Internet trading is a way to take control of their finances and save more money in the

process. Unfortunately, this is not always the case. The advantages of Internet stock

trading have also its weaknesses and these weaknesses present significant drawbacks for

the average investor.


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Depositories, Depository participants, Mutual Funds, FIIs and other participants in Indian

secondary and primary market is the Securities and Exchange Board of India (SEBI) Ltd.

DIFFERENCE BETWEEN ONLINE ANDDIFFERENCE BETWEEN ONLINE AND OFFLINE TRADINGOFFLINE TRADING

Nevertheless, with all the convenience of online trading there are still investors who prefer

the old fashion way of offline trading. Offline trading has lost some popularity but it is still

the main form of investing. Offline trading offers many benefits as well.

1. The one benefit that an investor appreciates the most is that they are not alone when

making investment decisions.

2. There are experienced and professional brokerage companies that handle their

investments for them.

3. Investors are not faced with the challenge of making these vital investment decisions;

especially, if they do not have the experience necessary to make the appropriate

investments.

4. Also, there is someone there to answer any questions that may cause concerns. Not to

mention, with offline trading mistakes are less likely to take place. No one wants to throw

their money away or stand by and watch someone else throw their money away. It may be

wise to hire a professional to assist you in making the correct investment decisions if you

feel you lack the knowledge necessary.

Points of difference between online trading and ofline trading are as follows:

1. Online trading is very expensive as compare to manual trading or offline trading.

2. Online trading consumes less time as compare to manual trading.

3. Online trading has very helpful to finding the records easily but offline trading takes more

time to finding the records.

4. In the help of online trading, there is no chance of any errors while doing the trading. in

offline trading there are some errors exist like barriers of communication .

5. With the help of online trading, we know the international market rate of share very

easily.


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DEMATERIALISATION OF SHARES

Dematerialization is the process wherein shares certificates or other securities held in

physical form are converted into electronic form and credited to demat account of an

investor opened with a depository participant. SEBI has made compulsory trading of shares

of all the companies listed in stock exchanges in demat form with effect from 2 nd January

2002.The procedure of opening a demat account with DP is similar to opening an account

with a bank.

ELECTRONIC SETTLEMENT OF TRADE

A. Procedure for purchasing dematerialized securities

The procedure for purchasing dematerialized securities is also similar to the procedure for

buying physical securities.

1. Investor instructs DP to receive credits into his account in the prescribed form. There may

be one time standing instruction or separate instruction each time to receive credits.

2. Investor purchases securities in any of the stock exchanges linked to depository through a

broker.

3. Broker receives payment from investor and arranges payment to clearing corporation.

4. Broker receives credit to securities in clearing account on the payout day.

5. Broker gives instructions to DP to debit clearing account and credit clients account.

Investor receives shares into his account by way of book entry.

B. Procedure of selling dematerialized securities

The procedure for selling dematerialized securities in stock exchanges is similar as selling

physical securities. The only major difference is that instead of delivering physical securities

to the broker, the investor instructs his DP to debit his demat account with the number of

securities sold by him and credit the brokers clearing account. The procedure for selling

dematerialized securities is given below:

1. Investor sells securities in any of the stock exchange linked to depository through a broker.

2. Investor instructs his DP to debit his demat account with the number of securities sold and

credit the brokers clearing account.


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3. Before the pay-in-day, broker of the investor transfers the securities to clearing corporation.

4. The broker receives payment from the stock exchange.

5. The investor receives payment from the broker for sale of securities in the same manner as

received in case of sale of physical securities.

REMATERILISATION OF SHARES

Rematerialization is the process of conversion of electronic holdings of securities into

physical certificate form. For rematerilisation of scrips, the investor has to fill up a remat

request form (RRF) and submit it to the DP. The DP forwards the request to depository

after verifying the investors balances. Depository in turn initiates the registrars and transfer

agent or the issuer company. RTA/ Company prints the certificates and dispatches the

same to the investor.

Market timings:

Trading on the derivatives segment takes place on all days of the week (except Saturdays

and Sundays and holidays declared by the Exchange in advance). The market timings of

the derivatives segment are:

Normal Market / Exercise Market Open time : 09:55 hours

Normal market close : 15:30 hours

Set up cut of time for Position limit/Collateral value : till 15:30 hrs

Trade modification end time / Exercise Market : 16:15 hours


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Record keeping

Working Groups set up by the Committee

Considering the present state of capital markets in India and keeping in view the

ongoing developments in Internet based securities business, it was felt that SEBI as a

regulator could strive to identify areas where use of Internet in the capital market is

possible within the existing legal framework. One such area identified by the Committee,

which is also the central within the existing legal framework. One such area identified by

the Committee, which is also the central theme of this report, is the area of Internet trading

on existing electronic exchange. In this area, through early introduction of Cyber Laws

would be highly describe but their existence is not a necessary precondition. To look into

the existing regulatory scenario and to bring out some ground rules for use of the medium

of Internet, the Committee therefore constituted the following two working groups to look

into the area of:

i. Security protocols and standardization of interfaces for Interest based securities trading,

chaired by Prof. Deepak B. Phatak, IIT, Pawai, Mumbai

ii. Surveillance and monitoring related issues arising due to Interest based securities trading,

chaired by Shri. L.K. Singhvi, Sr. ED, SEBI

The committee also requested Ms D N Raval, Executive Director, SEBI to examine

the legality of introduction of Internet trading and issue of Alternative trading systems. This

report of the standing committee examines the regulatory and security requirements

Internet Based Trading on Conventional Exchanges. Separate reports (s) will cover the

other areas related to Internet applications in the securities markets.

The report of the first working group on security protocols and standardization of interfaces

has since been submitted and incorporated in the report. The committee would like to place

on record its sincere thanks to Dr. D.B. Phatak, Ms. D.N. Raval and their team members.

The global financial market is undergoing a transformation due to rapid technological

developments. It thus becomes imperative that for developing in effective regulatory

framework developments in other parts of the world should be studies and analyzed.


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Internet trading is being facilitated by large brokerage houses, thus changing the total

concept of securities trading. A team comprising of members from stock exchanges and

SEBI visited the United states to these development and had interactions with brokerages

houses, Internet service providers and other agencies involved in facilitating Internet

trading. The team also discussed the developments in the emerging regulatory and

supervisory framework in United States with the Securities and Exchange Commission

officials. They were also tripped of the various initiatives taken by SEC in this regard. These

inputs have been utilized while drafting this report.

Recommendations of the Committee

Application for Permission by Brokers

SEBI registered Stock Brokers interested in providing Internet based trading services will

be required to apply to the respective stock exchange for a formal permission. The stock

exchange should grant approval or reject the application as the case may be, and

communicate its decisions to the number within 30 calendar days of the date of completed

application submitted to the exchange. The stock exchange, before giving permission to

brokers to start Internet based services shall ensure the fulfillment of the following minimum

conditions.

Net worth Requirement

The broker must have a minimum net worth of Rs. 50 lacs if the broker is providing the

Internet based facility on his own. However, if some brokers collectively approach a service

provider for providing the interest trading facility, net worth, criteria as stipulated by the

stock exchange will apply. The net worth will be computed as per the SEBI circular noFITTC/DC/CIR-1/98 dated June 16, 1998.

Operational Integrity: The stock Exchange must ensure that the system used by the

broker has provision for security, reliability and confidentiality of data through use of

encryption technology. This stock exchange must also ensure that records encryption

technology. The stock Exchange must also ensure the records maintained in electronic

from by the broker are not susceptible to manipulation.

System Capacity


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The stock Exchange must ensure that the brokers maintain adequate backup systems and

data storage capacity. The stock Exchange must also ensure that the workers have

adequate system capacity for handling data transfer, and arranged for alternative means of

communications in case of Internet link failure.

Qualified Personnel:

The stock Exchange must lay down the minimum qualification fro personnel to ensure that

the broker has suitably qualified and adequate personnel to handle communication

including instructions as well as other back office work which is likely to increase because

of higher volumes.

Written Procedures:

Stock Exchange must develop uniform written procedures to handle contingency situations

and for review of incoming and outgoing electronic correspondence.

Signature Verification/ Authentication:

It is desirable that participants use authentication technologies. For this purpose is should

be mandatory for participants to use certification agencies as and when notified by

Government/SEBI. They should also clearly specify when manual signatures would be

required.

Client Broker Relationship


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Know Your Client:

The stock Exchange must ensure that brokers have sufficient, verifiable information aboutclients, which would facilitate risk evaluation of clients.

Broker- Client Agreement:

Brokers must enter into an agreement with clients spelling out all obligations and rights.

This agreement should also inter alia, the minimum service standards to be maintained by

the broker for such service specified by SEBI/Exchange for the internet based trading from

time to time. Exchange will prepare a model agreement for this purpose. The broker

agreement with clients should not have any clause that is less stringent/contrary to the

conditions stipulated is the model agreement.

Investor Information:

The broker web site providing the internet based trading facility should contain information

meant for investor protection such as rules and regulations affecting client broker

relationship arbitration rules, investor protection rules etc. The broker web site providing the

Internet based trading facility should also provide and display prominently, hyper link to the

web site/page on the web site of the relevant stock exchange (s) displaying rules/

regulations/ circulars. Ticker/quote/order book displayed on the web-site of the broker

should display the time stamp as well as source of such information against the given

information.

Order/Trade Confirmation:

Order/Trade confirmation should also be sent to the investor through email at clientsdiscretion at the time specified by the client in addition to the other made of display of such

confirmation of real time basis on the broker web site. The investor should be allowed to

specify the time interval on the web site itself within which he would like to receive this

information through email. Facility for reconfirmation of orders which are larger than that

specified by the member's risk management system should be provided on the internet

based system.

Handling Complaints by Investors:


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Exchanges should monitor complaints from investors regarding service provided by brokers

to ensure a minimum level of service. Exchange should have separate cell specifically to

handle Internet trading related complaints. It is desirable that exchanges should also have

facility for on-line registration of complaints on their web site.

Risk Management:

Exchanges must ensure that brokers have a system-based control on the trading limits of

clients, and exposures taken by clients. Brokers must set predefined limits on the exposure

and turnover of each client. The broker systems should be capable of assessing the risk of

the client as soon as the order comes in. The client should be informed of

acceptance/rejection of the order within a reasonable period. In case system based control

rejects an order because of client having exceeded limits etc., the broker system may have

a review and release facility to allow the order to pass through.

Contract Notes:

Contract notes must be issued to clients as per existing regulations, within 24 hours of the

trade execution.

Cross Trades:

As a matter of abundant precaution, the committee seeks to reiterate that as III the case of

existing system, brokers using Internet based systems for routing client orders will also not

be allowed to cross trades of their clients with each other. All orders must be offered to the

market for matching.

It is emphasized that in addition to the requirements mentioned above, all existingobligations of the broker as per current regulation will continue without changes.

Exchanges may also like to specify more stringent standards as they may deem fit for

allowing Internet based trading facilities to their brokers.

Enforcement: A separate working group has been set to look into the surveillance and

enforcement related issues arising due to Internet based securities trading. However,

general anti-fraud provisions (SEBI Fraudulent and Unfair Trade Practices Regulations,

1995) would apply to all transactions involving securities or financial services, regardless ofthe medium


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FEATURES OF ONLINE TRADING

The Online Trading is having many features which make it most suitable for the investors

to go for. Some of these features are as follows:

The Internet can provide a new sense of control over your financial future. The amount of

investment information available online is truly astounding. It's one of the best aspects of

being a wired investor. For the first time in history, any individual with an Internet

connection can:

Know the price of any stock at any time

Review the price history of any stock in chart format

Follow market events in-depth

Receive a wealth of free commentary and analysis about stock markets and the global

economy

Conduct extensive financial research on any company

One of the great appeals of using an online trading account is the fact that the account

belongs to you, and is under your direct control. When you want to buy or sell stock, you no

longer need to call your broker on the phone; hope that he is in the office to place your

order; possibly argue with the broker about the order; and hope that the transaction is

executed instantly.


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At the most basic level, an online trading account gives you more agility in buying and

selling stocks. This is through sophisticated information streams, dedicated trading

platforms and sophisticated tools for accessing the markets.

Every broker house aims at providing the investor with the best price available. Also due to

the high level of transparency with regard to display of information relating to the specific

stocks and company profiles, you will be able to get the best quote for your orders.

Online trading offers you greater transparency by providing you with an audit trail. This

involves a complete integrated electronic chain starting from order placement, to clearing

and settlement and finally ending with a credit into your depository account. All these

stages are subject to inspection, thus bringing in transparency into the system.

Online trading integrates your bank account, your trading account and your demat

accounts, which leads to easy and paperless trading for you.

You as an Investment online customer will be able to execute the entire trading transaction,

right from logging on to our site, to the execution and settlement of your bank account, in a

very short period of time.

Trading on the net, gives even the smallest retail investor access to information that earlier

was available only to the big traders. This provides a level playing field for all investors in

the securities market.


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This method of trading reduces the settlement risk for the investor, as in this case all short

sell orders are squared off at the specified cut-off time and not allowed to be carried

forward.

In the case of a demat account your demat account is checked by us before executing your

sell transaction. This reduces the settlement risk for the buyer, who is assured of the

delivery of the securities and for you as a seller of the securities

Every trade is confirmed immediately and you will receive an on-screen confirmationfollowing every trade with full details for your records. This avoids costly errors that would

have been discovered when it is too late.

Your Bank, Depository and online account are integrated for your convenience. Various

broking houses provide access to many of the popular banks.

Broking houses work hard to keep our account and personal information secure. From

updated security technology to advanced fraud prevention measures, they have the people

and tools in place to provide a strong defense against electronic scams and fraud.

BENEFITS OF ONLINE BROKING

1) Less Costly: The most significant advantage of the Online broking is the cost reduction

in the brokerage. Due to the power of the Internet one has the privilege of becoming the

clients of really large brokerages with the benefits of enjoying the low charges hithelio

before enjoyed only by the big players. As the DP account has got linked to the trading

account most players do not charge a minimum transaction cost thus truly allowing one to

buy a single share and achieve meaningful rupee price averaging whatever be your buying

power.


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2) Peace of Mind: One can never have complete peace of mind but online investing does

away with the hassles of filling up instruction slips, visits to the broker for handing over

these slips and consequent costs.

3) Keeping Records: The site one trades on keeps a record of all transactions down to

unexecuted orders and cancelled orders thus keeping one abreast of all your transactions

24 hours a day. No paperwork means more time at ones disposal for research and

analysis.

4) Access to Information and investment Tools: Most online investing sites have a

wealth of information for their registered members. This includes research reports, results,

analysis and even gossip and the buzz in the market.

5.) Unparalleled Liquidity: The. bank account linked with the trading account invariably

has an A TM free. Most partner banks offer Internet banking as well. This results in ones

money becoming available to him whenever he like from his trading account. Conversely in

case he spot an opportunity in the market he can immediately allocate money from his

savings account to his trading account and make profits.

6.) Unparalleled Safety: Most sites are secure using 128-bit algorithms -highest available

commercially anywhere in the world. Moreover even if somebody broke in and tampered

with ones account the money from the stocks he sold or the stock bought from the money

in his account is in his account only.

7.) Reduces the settlement risk: This method of trading reduces the settlement risk for

the investor, as in this case no Short sale is possible i.e. the seller will not be able to sell

the securities unless he has their actual possession. In the case of a demat account(required for an online transaction), when a seller wants to sell the securities, his demat

account is checked by the Depository Participant before executing the sale transaction.

This reduces the settlement risk for the buyer, who is assured of the delivery of the

securities.

8.) Offers greater transparency: Online trading gives greater transparency to the

investors by providing them an audit trail. This involves a complete integrated electronic

chain starting from order placement, to clearing and settlement and finally ending with a


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credit to the depository account of the investor. All these stages are subject to inspection,

thus bringing in transparency into the system.

9.) Ease of trade: It is the ease of doing the trade through net, with a click of mouse, one

can buy or sell any share that is dematerialized.

Other than the above-mentioned advantages, Internet trading provides some additional

advantages to the investors, brokers and also helps the nation to channelize the resources.

Net trading would increase competition in the market hence increase in the bargaining

power of the investors. The entire communication between the investor, broker and

exchange would take place within milliseconds.

PROBLEMS OF ONLINE BROKING

There is a flip side to everything and online trading is no exception.


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Source:- www.lse.co.in

27% Loyality is of traditional broker

23% people says that online trading is more costly than manual trading.

21% people not prefer online trading because of lack of knowledge.

So, the main problems of online trading are as follows:

1.) "Server not found": This may appear on ones screens when he is desperately trying

to get out of an unprofitable position. Some of the online sites are providing a telephone

number for use in case their sites are overloaded or their server down.

2.) Connectivity of the Broker with NSE: Recently ICICI Direct had a connectivity

problem with the NSE for two and half hours during trading hours. This problem is rare but

be alive to its possibility.

3.) Cyber attack: In the event of a malicious attack on the systems of ones broker he is

protected only if the company is taking proper precautions against such attacks and if

proper backup is regularly been taken. He may like to choose a brokerage that has a stated

security policy and contingency plan in place.

4.) Non-availability of a seamless interface: As a client one will access the NSE through

a server of the online brokerage and this may involve queuing delays. If a number of client

access the server the server takes its own time sending the orders to the NSE server. He

must check out the seamlessness of this interface before selecting an online brokerage.

The faster the orders are processed the more seamless is the interface.

5.) Non- availability of personalized advice: If one like to ask his broker "Aaj kya achcha

lag raha hai" he may not be able to do so. If he want advice on a particular stock in his

portfolio he may not even be able to get that.

6.) Margin: If Internet trading alone is not fast and furious enough; many people are tradingon margin. That is where the brokerage firm lends you money by leveraging his account,


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allowing him to buy a large amount of securities by putting up only a small amount of

money. He may have forgotten what he read in the small print of his agreement, but the

brokerage firm has the right to change the maintenance margin requirements without any

warning or notice to him. In fact, the firm has the right to liquidate his securities holdings

(and it can pick and choose which ones) without any notice to one if he fail to meet the

margin call. And there he was leveraged to the hilt, hoping to hit a home run when he

discovered that he is required to make a large deposit that he cannot make. 8.) Increased

charges: Some of the brokers are of the view that they would have to provide advisory

services to the customers. But with increased volumes, they will have to follow the

international practice of charging a little more than the normal charges from a customer

looking for personal advice.

PROCESS OF ONLINE TRADING

An investor interesting in trading through Internet shall have to, firstly register himself with

an Internet brokerage firm. Some formalities such as filling the account opening form of the

e-broker, copies of identity proof, copy of residence proof are made to register himself with

the e-trader. Secondly, the investor would be required to open a bank account with a

scheduled bank and sufficient balance should be kept in the account. Thirdly he would be

required to open account with a depository participant because only dematerialized shares

can be traded on Internet.

The client places order via the net by logging on to his

Brokers site.

The broker accepts and executes the order and

places it with the exchange

The exchange accepts the order after checking the sharelimit

for the day.


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So, generally following steps are followed while doing the trading through the Internet:

Step-I: Those investors interested in doing the trading over Internet system, that is, NEAT -

ISX (NSE), should approach the brokers and register with the Stock Broker.

Step-2: After registration, the broker will provide to them a login name, password and a

personal identification number (PIN).

Step-3: Actual placement of an order, using the place order window as under can then

place an order:

(a) First by entering the symbol and series of stock and other parameters such as quantity

and price of the scrip on the place order window.

(b) Second, fill in the symbol, series and the default quantity.

Step-4: It is the process of review. Thus, the investor has to review the order placed by

clicking the review option. He may also re-set to clear the values.

The broker makes the payment either directly via the client

bank account or pays through its own account and recovers itlater from the client.

The exchange receives money and completes thesettlement.

The client is intimated about the settlement either

through the demat or via e-mail.


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Step-5: After the review has been satisfactory; the order has to be sent by clicking on the

send option.

Step-6: The investor will receive an "Order Confirmation" 'message along with the order

number and the value of the order.

Step- 7: In case the order is rejected by the Broker or the Stock Exchange for certain

reasons such as invalid price limit, an appropriate message will appear at the bottom of the

screen. At present, a time lag of about ten seconds is there in executing the trade.

Step-8: It is regarding charging payment, for which there are different modes. Some

brokers will take some advance payment from the, investors and will fix their trading limits.

When the trade is executed, the broker will ask the investor for transfer of funds by the

investor to his account.


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THE MECHANICS OF ONLINE TRADING

CLIENTBROKERSTOCK EXCHANGEPlaces an order on

the net on the

brokers website

through the

distinctive I.D.

code

Accepts the

order, Checks

the clients

Identity and

places order

Accepts the order

after checking the

scrip limit of the

brokerfor the day

Executes the order

The settlement of

the deal (buy/sell

order)gets

reflected in his

Demat account .

The client is

intimated about the

execution of the

deal by e mail

Pays the brokerpending physical

delivery

Pays the

Exchange

Through his

owns account

and receives it

from the client

account.

Receives the

money and

completes the

settlement


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Rolling Settlement Cycle

In a rolling settlement, each trading day is considered as a trading period and trades

executed during the day are settled based on the net obligations for the day. At NSE and

BSE, trades in rolling settlement are settled on a T+2 basis i.e. on the 2nd working day. For

arriving at the settlement day all intervening holidays, which include bank holidays,

NSE/BSE holidays, Saturdays and Sundays are excluded. Typically trades taking place on

Monday are settled on Wednesday, Tuesday's trades settled on Thursday and so on.


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Concept of Buying Limit

Suppose you have sold some shares on NSE and are trying to figure out that if you canuse the money to buy shares on NSE in a different settlement cycle or say on BSE. To

simplify things for ICICI Direct customers, we have introduced the concept of Buying Limit

(BL). Buying Limit simply tells the customer what is his limit for a given settlement for the

desired exchange. Assume that you have enrolled for a ICICI Direct account, which

requires 100% of the money required to fund the purchase, be available. Suppose you

have Rs 1,00,000 in your Bank A/C and you set aside Rs 50,000 for which you would like

to make some purchase. Your Buying Limit is Rs 50,000. Assume that you sell shares

worth Rs 1,00,000 on the NSE on Monday. The BL therefore for the NSE at that point of

time goes upto Rs 1,50,000. This means you can buy shares upto Rs 1,50,000 on NSE or

BSE. If you buy shares worth Rs 75,000 on Tuesday on NSE your BL will naturally reduce

to Rs75,000. Hence your BL is simply the amount set aside by you from your bank account

and the amount realized from the sale of any shares you have made less any purchases

you have made. Your BL of Rs 50,000, which is the amount set aside by you from your

Bank account for purchase is available for BSE and NSE. As you have made the sale of

shares on NSE for Rs.100000, the BL for NSE & BSE rises to 1,50,000. The amount from

sale of shares in NSE will also be available for purchase on BSE. ICICI Direct

Future Agenda:

Under the existing legal and regulatory framework, SEBI registered brokers can offer

trading on Internet through order is routing systems. However, with the rapid development

of the technology, we have to evolve fisher steps in this direction it is therefore proposed

that as the next step link between the depositories and banks shall be established after the

necessary regulations have been passed. This would reduce the clearing and settlement

time and would also minimize the risk of all the participants involved in the transactions. We

have to look forward towards achieving an ideal scenario where all the services related tosecurities markets including marketing of initial public offers on internet, providing


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investment advisory services to the clients, broking, clearing and settlement etc., are

provided on the Internet by an intermediary. In a nutshell it can be said that we are moving

towards a one-stop service center.

DURATION OF STUDY

The duration of study of the project is 45 Days.

From 15 May to 30 June 2011

OBJECTIVE OF STUDY


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In present era the stock market is one of the popular markets in India, the economy of any

country affects very much by the bull and bear condition of the stock market. Previously all

trade in the stock exchanges were done in the physical form of the share certificates but

presently because of the inconvenience of that physical mode all the trades in stock

exchanges are done in Demat mode. And my main objectives to have my training in Anand

Rathi Share & Stock Brokers Ltd. are: -

1. To understand the appropriate organizational structure of the ANAND RATHI SHARE &

STOCK BROKERS LTD. LTD

2. To analyze the online trading and its process.

TYPES OF RESEARCH

The various kinds of research are:

EXPERIMENTAL RESEARCH DESIGN EXPLORATORY RESEARCH DESIGN


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DESCRIPTIVE& DIAGNOSTIC RESEARCH

Exploratory Research Design:

This research design is preferred when researcher has a vague idea about the problem the researcher

has to explore the subject.

Experimental Research Design:

The research design is used to provide a strong basis for the existence of casual relationship between

two or more variables.

Descriptive Research Design:

It seeks to determine the answers to who, what, where, when and how

questions. It is based on some previous understanding of the matter.

Diagnostic Research Design:

It determines the frequency with which something occurs or its association with something else.

Research Design Used in this Project :

Research Design chosen for this study is Descriptive Research Design. Descriptive study is based onsome previous datas . Research has got a very specific objective and clear cut data requirements.

SAMPLE SIZE

SAMPLING METHODOLOGY

Sampling Technique


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Initially, a rough draft was prepared a pilot study was done to check the accuracy of

the Questionnaire and certain changes were done to prepare the final questionnaire to

make it more judgmental.

Sampling Unit

The respondents who were asked to fill out the questionnaire in the National

Capital Region are the sampling units. These respondents comprise of the persons

dealing in stock trading. The people have been interviewed in the open market, in front

of the companies, telephonic interviews and through other sources also

Sample Size

The sample size was restricted to only 100 respondents.

Sampling Area

The area of the research was Jaipur.

SCOPE OF STUDY


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Since the year 2000 a big boom has been witnessed in the Indian Stock Market

when the market showed the coming up of Online Trading System. Many online stock

trading companies came but initially due to lack of online trading some companies

vanished and some survived. The companies which survived are getting the handsome

returns also attracting the foreign Investment Companies. Nowadays this sector is facing

cut-throat competition and also provides huge growth prospects. The study then goes to

evaluate and analyze the findings so as to present a clear picture of the trends in the

online trading sector.

The study is limited to Anand Rathi Share & Stock Brokers Ltd., Jaipur

Data Collection:

Data is collected from secondary sources.

Sources of data collection are:

1) www.rathi.com

2) www.nseindia.com

3) www.bseindia.com

4) www.on-linetrading.com


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LIMITATIONS OF STUDY

There were certain limitations faced during the study.

Some people were not willing to disclose the investment profile

.The biasedness was being taken care of.

The area of sample was decided after taking into consideration the major factors like

Availability of investors

Approachability,

Time available with investor for interaction, etc.


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FACTS & FINDINGS

1. For how long you have been trading with on line-trading?

(a)1 year (b) 2 year

(c) 3 year (d) 4 year

Findings:

According to this survey we find that 44% people says that we are investing the money

online from one year and 26% people says that we are investing the money online from 2

years and 19% to 11% people says that we are investing money online from 3 to 4 year. so

we can say that now online trading is very popular in the modern market.

2. How will you describe your experience with on-line trading till date?

(a) very easy to operate

(b) very difficult to operate

(c) not secure

(d) Any other


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Sample size 100

Findings:

According to this survey we find that 60% of people find very easy to operate and 15%

people find diffcuilt two operate and 10% and 15% people find no secure and any other. so

we can say that online trading is very simple to operate and easy to understand.

3. what amount of money you invest normally ?

(a) 50000 (b) 100000 to 150000

(c) 150000 to 2000000 (d) Any other amount

Sample size 100

Findings:

According

to this


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survey we find that 35% of people invest money normally 50000 and 28% of people invest

money 100000to150000 and 23% and 14% of people invest money between

150000to200000 and any other. So we can say that the people are not invest more money

in the share market because there is a great risk involved while doing the trading.

4 How often do you trade?

(a)Daily (b) Weekly

(c) Monthly (d) More than one month

Sample Size 100

Findings:

According to this survey we find that 10% of people do trade Daily and 40% people do

trade weekly and 32% and 18% people do trade month and more than month. So we can

say that people are generally invest in stock market weekly basis.


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8. Which media would you prefer the most for investment?

(a) T.V (b) Newspaper

(c) Magazines (D) Journals

Findings:

According to this survey we find that 55% people Prefer T.V and 25% people prefer

newspaper and 10% people prefer magazines and 10% people prefer journals. So we can

suggest that mostly people are very easily grapped the knowledge through T.V.

Sample size 100


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ANALYSIS & INTERPRETATION

Q. 1 what is your annual income?

INTERPRETATION

58% respondent are having the income level of 100000-200000 ,21% is having 200000-

300000 , 12% in having300000-400000 , 7% of the total respondent are having income more

than 400000 per annum and only 2% are having less than 100000 per annum.

To invest in the stock market minimum 100000 or more than this should be the annual

income level of the people. In India the per capita income in also increasing so we can say

that there is a good opportunity for the online trading market.

Q. 2 what percentage of your monthly household income could be available for

investment?


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INTERPRETATION

According to the data 23% of the total respondent invest less than 5% of their income,

41% respondents are saying that they invest 5%-10% of their monthly income (which is

highest)

Whereas the 21% investor do the investment 10%-15% of their total monthly income, 13

invest between 15%-20% of the total income and only 2% does more than 20% of their

income invest in the market

We can easily understand that 75% of the total population is having a good amount of

investment, so the investment is there in the market; good number of people is ready to

invest a good amount in the market

91% of respondent is in the income level of 100000 300000 (according to the last question

analysis).

So we can say that stock brokerage houses will have to do a good business with the help of

Online trading system with few value addition services

Q. 3 where do you often invest your money?

INTERPRETATION

Highest number of respondent is having their investment in the equity that is 65% whereas

the investment available for the mutual fund, term deposit and insurance is 14%, 12% and

9%


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So the investor for equity is high which is again showing the n number of opportunity for

online trading.

Q. 4 to operate a computer is easy for me

INTERPRETATION

76% (26+51) of the total respondent believe that operate a computer is easy for me

whereas 20%(13+7) of the respondent is having problem to operate a computer out of that

20% , 75 believe that they cant go for computer

So, if 78% of the people who are dealing with the stock market is having computer at their

house and around 76% of the same population dont have any problem to operate a

computer

So around 60 % is there who is having computer and they dont have problem to operate a

computer

Q. 5 Do you use online trading facility?


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Interpretation

It was observed that 83% of total sample people dont like online trading. And 17% of total

sample people are using online trading.

It seems that online trading is not so much popular or if it is popular that people dont trust on

online trading. According to that person online trading is not so user friendly.

Q.6 According to you online trading is a secure way of trading

INTERPRETATION

71% of the respondent is having a positive thinking that online trading is a secure way of

trading whereas 185 of the respondent believes that online trading is not a secure way of

trading


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Satisfaction about the process, by which they will be going to do a trading that is online

trading, should be there in the mind of the customer. If they believe that their is no risk over

the money which they are going to invest in the market with the help of online trading, there

will be a perception to go for online trading at least one time

Q.7 Online trading is easy and fast way of trading?

INTERPRETATION

51% of the total respondent believe that online trading is a easy task Whereas 41% of the

respondent believes that to deal with online Trading is not a easy task and 85 was confusedto anything about that the trading via internet is a easy task or not

There is a difference between the people who believe and who dont believe is not very big

that is only 10% , the reason of this problem can be if a person is doing its investment on its

own he or she think of the problem of being mistaken in the transaction. So there is a need

of proper training to do trading online


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Q.8 Introduction of online trading helped to attract the new Investors thus increasingthe trading volumes at Stock Market?

INTERPRETATION

76% of the respondent believe that the introduction of online trading helped to attract the

new customer became the reason to increase the trading volume of the market On the other

side 16% of the respondent believe that it doesnt affect the trading volume

Q9. What factor would you consider before choosing an account in a brokerage

house?


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Interpretation

29% of total sample population go for brand name, 32% of total sample population go for

services by broking firms, 21 % people care for brokerage and other kind of charges, 11%

ask for online trading facility & 7% people go according to other reasons.

This shows that most of people are brand loyal and service oriented.

Q10. Do you think online trading has affected the trend of trading?

Interpretation

39% of total sample people say that they feel online trading has affected the trading

patterns, 47% of total people deny and feel that online trading has not affected any pattern

and 14% people are not sure about anything. They can not say anything about the onlinetrading.


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Q11. Online trading is better tool to trade in comparison of traditional trading

Interpretation

It is interpreted that 17% of total sample population strongly agree that online trading is

better tool, 19% total population agree, 23% cant say, 17% disagree with this and 24%

people say that online trading dont have any effect on traditional trading

Q.12 Are you satisfied regarding online trading services by your broking house?

INTERPRETATION


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26% of total sample people told that they are not satisfied with the online trading facility.

They face some problems while using online trading and 74% of total people told that they

are fully satisfied with the online trading facility.

So we can say that there is a huge potential in the market for the trading in the stock market

SWOT ANALYSIS

Strength

1. Low cost of investing.

2. Minimum investment maximum profit.

3. Define your loss through only risk of premium losing.

4. Good hedging instrument.

5. Different Option strategies make profit in rang bound market.

6. Huge option category to choose.

Weakness

1. Low volume in stock option.


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2. High volatility in price change.

3. Behavior of option to minimize the time value according nearness of expiry date.

4. Time value makes huge difference in investing money.

5. Difficult to understand by normal investor.

Opportunity

1. Opportunity of making money with less money through purchase the call and put.

2. Hedging opportunity

manish loudi

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